Press Release

D.C. Groups Oppose Obama's Fed Choices

(Washington, D.C.) - As President Obama prepares to announce his nomination to succeed Ben Bernanke as chair of the Federal Reserve, two Washington-based conservative organizations in favor of sound money became the first to preemptively oppose his potential nominees of Lawrence Summers, Janet Yellen or Donald Kohn in an open letter.

"The next Federal Reserve chair should be committed to returning the Fed to its focus on sound money as a foundation for growth, not enabling big spenders in Washington," said Daniel Garza, Executive Director of The LIBRE Initiative.

American Principles Project, an organization dedicated to preserving and propagating the fundamental principles on which our country was founded, and The LIBRE Initiative, a grassroots organization that advances the principles and values of economic freedom to empower the U.S. Hispanic Community, have teamed up to author a letter opposing these prospective Federal Reserve chairs.

Below is the open letter from the American Principles Project and The LIBRE Initiative:

"Sound money is the cornerstone of a fair and prosperous economy. Having lost sight of this time-tested truth, the Federal Reserve has been monetizing massive amounts of government debt. This policy has generated a little extra growth at an enormous cost. It has enriched the ultra-wealthy and supported the spendthrift U.S. government, while burdening the middle class with rising prices.

As Chairman Bernanke's term comes to an end, America has an opportunity to change course. Unfortunately, President Obama's potential appointees, Lawrence Summers, Janet Yellen, and Donald Kohn have pledged to continue the status quo: bond buying and ultra-low rates that finance big government and redistribute wealth toward those who already have it.

Vice Chairwoman Yellen is the only member of the Federal Reserve Board of Governors who has been consistently more dovish than even Bernanke, voting for money printing and lower rates at every opportunity. She has said that more inflation can be the "humane policy." Donald Kohn, in his eight years on the Federal Open Market Committee, voted in lock step with Bernanke. Summers, a paid consultant to Citibank, is an open advocate of Keynesian deficit stimulus who has argued for taking advantage of the Fed's zero interest rate policy to boost expenditures. These three approaches to the job would lead to the same result: more money printing.

We call on President Obama and the Senate to reorient U.S. monetary policy toward the preservation of the value of the dollar. The next leader of the Fed should aim for long-run price stability - not 2 percent inflation - while allowing the marketplace to set interest rates. In time, long-run price stability will free the economy from the interference of the Fed, circumscribe the government's debt-fueled expansion, and reverse the decline in middle-class living standards caused by rising prices."